Indian investigators say an online trading platform marketed as a gateway to global markets instead functioned as a carefully engineered system of loss, moving billions of rupees through a web of shell entities, foreign servers and cryptocurrency wallets that stretched across Europe and Asia
A Trading Platform Built on Asymmetry
For years, OctaFX presented itself to Indian customers as a sophisticated online gateway for trading currencies, commodities and cryptocurrencies. According to investigators, the experience offered to users was far less neutral. The Enforcement Directorate (ED) has alleged that the platform manipulated core trading mechanics—altered candlestick charts, engineered slippage and algorithmic interventions—ensuring that losses accumulated steadily on the client side.
To expand its reach, OctaFX relied on an Introducing Brokers, or IB, model that rewarded individuals and entities for funneling clients onto the platform. Commissions were tied directly to trading volume, a structure investigators say incentivized aggressive recruitment rather than sound investment outcomes. Initial withdrawals and small profits were permitted, officials said, mirroring the trust-building phase typical of Ponzi-style schemes.
All of this activity, the agency maintains, took place without the approval of the Reserve Bank of India, which regulates forex trading involving Indian residents.
Money Trails Through Mules and Markets
Funds from Indian investors flowed in through everyday channels—UPI payments and local bank transfers—before being fragmented across accounts held by dummy entities and individuals. The layering, investigators say, relied heavily on mule accounts to obscure the trail before money was pushed overseas.
According to court filings and ED statements, these transfers were disguised as payments for software imports or research and development services. The funds were routed to companies controlled by Pavel Prozorov, a Russian national identified by investigators as a central figure behind the operation. Portions of the money later re-entered India as foreign direct investment, while other sums were used for luxury consumption, property purchases and the acquisition of high-value assets, including yachts.
Cryptocurrency played a parallel role. Officials say large amounts were parked in digital wallets under Prozorov’s control, adding another layer of opacity to the financial flows.
A Distributed Network Spanning Continents
The ED describes OctaFX as operating through a deliberately fragmented global structure. Marketing functions were routed through entities in the British Virgin Islands; servers and back-office operations were hosted from Spain; payment gateways were managed from Estonia; technical support came from Georgia; and a Cyprus-based entity served as a holding company for the Indian arm.
Oversight of Indian operations, investigators allege, was exercised from Dubai, with Russian promoters coordinating strategy. Singapore-based entities were used to facilitate the export of what officials describe as bogus services, enabling the laundering of proceeds abroad. Indian nationals employed in Russia and Spain provided localized customer support, reinforcing the appearance of legitimacy for Indian users.
International Cooperation and Asset Hunts
As the scope of the alleged fraud widened, Indian authorities turned outward. The ED has issued a Silver Notice through Interpol, enabling the sharing of intelligence on criminal assets held overseas. Investigators say they are working closely with the Federal Bureau of Investigation and Europol to trace funds, particularly cryptocurrencies.
Spanish authorities have played a central role. Prozorov was arrested in October by Guardia Civil, and officials in Madrid have shared details of properties and vehicles linked to him. Estonia, investigators said, has also provided information on companies and residential addresses tied to the network.
The ED estimates that Indian investors were duped of roughly ₹1,875 crore between July 2022 and April 2023 alone, while total profits generated from India between 2019 and 2024 may exceed ₹5,000 crore, much of it allegedly siphoned abroad. Assets worth ₹2,681 crore have already been attached, including cryptocurrencies and luxury properties in Spain. Two charge sheets have been filed against OctaFX and dozens of associated individuals and entities.
The investigation continues to unfold across borders, piecing together how a platform that promised access to global markets became, investigators allege, a conduit for one of the largest cross-border online trading frauds faced by Indian authorities.
